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No further Extension of Due Dates for ITR and Tax Audit Reports for AY 2020-21 - CBDT Issues Order u/s 119

no-further-extension-of-due-dates-for-itr-and-tax-audit-reports-ay-2020-21-cbdt-issues-order-us-119

CBDT passes order u/s 119 of Income-tax Act, 1961 in F. No. 370153/39/2020-TPL dated 11th January 2021 disposing-off the representations for extension of due date for filing of Audit Report u/s 44AB, in compliance with the order of Hon'ble Gujarat High Court dated 8th January 2021 and denied the extension in the due date for filing of Income Tax Returns (ITR) and Tax Audit Reports (TAR) for the AY 2020-21.


The Gujarat High Court in the case of The All Gujarat Federation of Tax Consultants vs. Union of India directed the CBDT to consider the pleas taken by the petitioners for extending the due date of filing of income tax returns (ITR) and tax audit reports (TAR) for AY 2020-21 and to take an appropriate decision on the matter by 12th January 2021.


The Board has given the justifications for denial in extending the time limit for furnishing the ITR and TAR for the AY 2020-21. As per the Order, the Board has already extended the due dates on three occasions as detailed below-


S.No.

Action

Original Due Date

1st Extension vide TOLA, 2020

2nd Extension vide notification S.O. 3906(E) dated 29.10.2020

3rd Extension vide notification S.O. 4805(E) dated 31.12.2020

1.

Return     for Non-Audit Cases

31.07. 2020

30.11.2020

31.12.2020

10.01.2021

2.

Tax Audit

30.09.2020

31.10.2020

31.12.2020

15.01.2021

3.

Return for Tax Audit cases

31. 10.2020

30.11.2020

31.01.2021

15.02.2021


Further, the CBDT has supported its action on the basis of statistics of filing of income tax returns and tax audit reports of the current assessment year 2020-21 with the preceding year.


It further justified its action of non-extension of the due date is the comparison of extension of due dates of India with other economies/countries in the pandemic period.


The Order concluded that the Government has been proactive in analyzing the situation and providing relief to the assessee. However, it should also be appreciated that filing of tax returns/audit reports are an essential part of the obligations of the assessee and cannot be delayed indefinitely. Many functions of the Income-tax Department start only after the filing of the returns by the assessee. Filing of tax returns by assessee also results in collections of taxes either through the payment of self-assessment tax by the assessee or by the subsequent collection by the department post-processing or assessment of the tax returns. The tax collections assume increased significance in these difficult times and the Government of India needs revenue to carry out relief work for poor and other responsibilities. Any delay in filing returns affects the collection of taxes and other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected. Sufficient time has already been given to taxpayers to file their tax returns and a large number of taxpayers have already filed their returns of income.


The reasons for denial of further extension of due dates are summarized as under-


• The due dates for filing of return/tax audit have already been extended on 3 occasions.


• Internationally, the extension provided by India is more generous as compared to other countries.


• The return filing statistics of the current year indicates that returns filed in this financial year already far exceeds the returns filed which were due on the last date of filing of returns.


As per the CBDT, any further extension would adversely affect the return filing discipline and shall also cause injustice to those who have taken pains to file the return before the due date. It would also postpone the collection of revenue thereby hampering the efforts of the Government to provide relief to the poor during these COVID times. 



The Board also relied on the decision of the Supreme Court in the case of Govt. of A.P. v. N. Subbarayudu and rejected all the representations for further extension of the due date for furnishing the ITR and TAR for AY 2020-21.


Read the full text of the Order issued by CBDT u/s 119 dated 11.01.2021 on the rejection of the extension of due dates for filing of ITR and TAR for AY 2020-21


F.NO. 370153/39/2020-TPL 

GOVERNMENT OF INDIA 

MINISTRY OF FINANCE 

DEPARTMENT OF REVENUE

(CENTRAL BOARD OF DIRECT TAXES)

(TAX POLICY AND LEGISLATION DIVISION) 

*********** 


New Delhi, 11th January, 2021 


ORDER UNDER SECTION 119 OF INCOME TAX ACT, 1961


The Hon'ble Gujarat High Court vide judgement dated 8 th January, 2021 in the case of The All India Gujarat Federation of Tax Consultants Vs. Union of India, SCA 13653 of 2020, has directed the Ministry of Finance to look into the issue of extension of due dates for filing of Audit Report under section 44AB of the Income tax Act more particularly the representation dated 12.10.2020 and take an appropriate decision in accordance with law. 


2. In the wake of the global pandemic due to COVID-19 the due dates for filing of income tax returns for A.Y. 2020-21 was extended vide the Taxation and Other _laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (which was enacted on 29th September,2020) to 30th November, 2020. Subsequently, vide notification s.o. 3906(E) dated 29th October, 2020 the due dates for filing of returns were further extended to 31st January, 2021 for cases in which tax audit report under section 44AB of the Income tax Act ("the Act") is required to be filed and 31 st December, 2020 for all other cases. Further vide notification S.O. 4805 (E) dated 31st December, 2020 the above due dates were further extended to 15th February, 2021 and 10th January, 2021 respectively. 


3. As per the provisions of the Act the due date for filing of the audit report under section 44AB is one month prior to the due date of filing of income tax return. Therefore, the said due date was extended to 31st October, 2020 vide the Taxation and Other laws (Relaxation and Amendment of Certain Provisions) Act, 2020, 31st December, 2020 vide notification s.o. 3906(E) dated 29th October, 2020 and further to 15th January, 2020 vide notification s.o. 4805 (E) dated 31st December, 2020. 4. The due dates for payment of self-assessment tax, for taxpayers whose amount due does not exceed rupees one lakh, also coincide with the due dates for filing of income tax returns. The table below summarises the various due date extensions given:


S.No.

Action

Original Due Date

1st Extension vide TOLA, 2020

2nd Extension vide notification S.O. 3906(E) dated 29.10.2020

3rd Extension vide notification S.O. 4805(E) dated 31.12.2020

1.

Return     for Non-Audit Cases

31.07. 2020

30.11.2020

31.12.2020

10.01.2021

2.

Tax Audit

30.09.2020

31.10.2020

31.12.2020

15.01.2021

3.

Return for Tax Audit cases

31. 10.2020

30.11.2020

31.01.2021

15.02.2021


5. Thus, it is apparent that the Government has not only considered representations of various stakeholders but also has been proactive in providing relaxation to the taxpayers by extending due dates regularly. The table below gives the statistical data comparing the return filing statistics of A.Y. 2019-20 and A.Y. 2020-21


Date - This

year

AY 20-21

ITRs filed

Daily figures

Date -Last year

AY 19-20

ITRs filed

Daily Figures

05-

Jan-21

5,08,48,022

7,26, 177

26-Aug-19

4,14, 13,558

13,65,348

06-

Jan-21

5,16,71,398

8,23,376

27-Aug-19

4,30,99,600

16,86,042

07-

Jan-21

5,27, 14,75 1

10,43,353

28-Aug-19

4,5 1,44,749

20,45, 149

08-

Jan-21

5,41,54,435

14,39,68d

29-Aug-19

4,77,39,460

25,94,Y1 1

09-

Jan-21

5,64, 10,561

22,56, 126

30-Aug-19

5,12,55,607

35, 16, 147

10-

Jan-21

5,95,15,322

31,04,761

3I-Aug-19

5,6 1,79,905

49,24,298

From the above table, it is apparent that the number of returns filed this year has already exceeded the number of returns filed last year up to 31 st August which was the last day of filing of the all the returns other than the company/tax audit returns, by about 6%. The table below gives the statistical data comparing the filing statistics of tax audit report for A.Y. 2019-20 and A.Y. 2020-21-


Date

Form 3CA

Form 3CB

Date

Form 3CA

Form 3CB

20-Oct-19

2,741

29,760

04-Jan-21

3,O’79

27,492

21-Oct-19

5,598

51,069

05-Jan-21

3,238

28,875

22-Oct-19

7,626

62,938

06-Jan-21

3,190

30,582

23-Oct-19

9,125

75,031

07-Jan-21

3,323

31,035

24-Oct-19

10,977

87,350

08-Jan-21

3,316

29,92d

25-Oct-19

11,841

93,575

09-Jan-21

2,82d

26,097

26-Oct-19

10,366

91,397

10-Jan-21

1,416

16,370

27-Oct-19

2,309

30,861

11-Jan-21

 

 

28-Oct- 19

6,138

59,785

12-Jan-21

 

 

29-Oct-19

10, 119

1,00,569

13-Jan-21

 

 

30-Oct-19

23, 125

1,87,444

14-Jan-21

 

 

31-Oct-19

42,280

3,15,190

15-Jan-21

 

 

Grand

Total

cumulative

2,88,236

25,37,444

Grand

Total

cumulative

2,14,804

18,49,461


6. The above table also show that majority of the audit reports under section 44AB of the Act as well as income tax returns are filed within the last few days of the dates only. For A.Y. 2019-20 it is seen that 24% of total audit reports were filed in last 3 days before the due date. Therefore, lesser filing compliances having been made much before the due date cannot be said to be an anomalous situation. 


7. A look at the relaxation of similar nature provided by other economies globally makes it clear that the Government of India has been very empathetic to the needs of the taxpayers as compared various other countries. It is apparent from the table no other country has extended the due dates as much as India. Even countries which are comparatively worse hit by COVID-19, like the USA, UK etc., have provided n o or lesser extensions in due dates. The table below lists such extensions given by a few countries: -



County

Financial

period

INDIVIDUAL

CORPORATE

Due date

Extended due date

Due date

Extended due date

USA

2019

15th April,

2020

15th

October, 2020

15th

2020

April,

15th

October, 2020

UK

2019- 2020

31

January 2021

No

extension

31st

December, 2020

No

extension

 

 

Australia

2018 -2019

5th   May,

2020

5th

2020

June,

15th

2020

May,

5th

2020

June,

South Africa

2019

16th

November,

2020

No

extension

31st December, 2020

No

extension

Netherlands

2019

1st May,

2020

No

extension

1 st

2020

June,

No

extension

Ireland

 

2019

 

12

November,

2020

10th

December,

2020

12th

November,

2020

10th

December,

2020

Singapore

2019

18th April,

2020

31st  May,

2020

15th December, 2020

15th January, 2020

Canada

2019

30th April,

2020

30th September,

2020

May-Aug 2020

30th September,

2020

Brazil

2019

1st March, 2020

30th April, 2020

30th April, 2020

30th June, 2020


8. From the above it may be seen that Government has been proactive in analyzing the situation and providing relief to assessee. However, it should also be appreciated that filing of tax returns/audit reports are essential part of the obligations of assessee and cannot be delayed indefinitely. Many functions of the Income-tax Department start only after the filing of the returns by the assessee. Filing of tax returns by assessee also results in collections of taxes either through payment of self-assessment tax by the assessee or by the subsequent collection by the department post processing or assessment of the tax returns. The tax collections assume increased significance in these difficult times and Government of India needs revenue to carry out relief work for poor and other responsibilities. Any delay in filing returns affects collection of taxes and other welfare functions of the state for the vulnerable and weaker sections of society which is funded through the revenue collected. Sufficient time has already been given to taxpayers to file their tax returns and a large number of taxpayers have already filed their returns of income. 


9. From the above discussion, it is apparent that,- 

• The due dates for filing of return/tax audit have already been extended on 3 occasions. 

• Internationally, the extension provided by India is more generous as • compared to other countries.

• The return filing statistics of the current year indicates that returns filed in this financial year already far exceeds the returns filed which were due on the last date of filing of returns. 


Any further extension would adversely affect the return filing discipline and shall also cause injustice to those who have taken pains to file the return before the due date. It would also postpone the collection of revenue thereby hampering the efforts of the Government to provide relief to the poor during these COVID times. 


10. In this regard, the decisions of the Hon'ble Supreme Court have also been considered. The Hon'ble Supreme Court in the case of Govt. of A.P. v. N. Subbarayudu, (2008) 14 see 702 at page 703


“5. In a catena of decisions of this Court it has been held that the cut-off date is fIXed by the executive authority keeping in view the economic conditions, financial constraints and many other administrative and other attending circumstances. This Court is also of the view that fixing cut-off dates is within the domain of the executive authority and the court should not normally interfere with the fixation of cut-off date by the executive authority unless such order appears to be on the face of it blatantly discriminatory and arbitrary. (See State of Punjab v. Amar Nath Goyal [(2005) 6 SCC 754 : 2005 SCC (L&S) 910]. 


*** 


7. There may be various considerations In the mind of the executive authorities due to which a particular cut-off date has been fixed. These considerations can be financial, administrative or other considerations. The court must exercise judicial restraint and must ordinarily leave it to the executive authorities to fvc the cut-off date. The Government must be left with some leeway and free play at the joints in this connection. 


8. In fact several decisions of this Court have gone to the extent of saying that the choice of a cut-off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter-affidavit filed by the Government (unless it is shown to be totally capricious or whimsical), vide State of Bihar v. Rarnjee Prasad [(1990) 3 SCC 368 : 1991 SCC (L&S) 51] , Union of India v. Sudhir Kumar Jaiswal [(1994) 4 SCC 212: 1994 SCC (L&S) 925: (1994) 27 ATC 561] (vide SCC para 5), Ramrao v. All India Backward Class Bank Employees Welfare Assn. [(2004) 2 SCC 76 : 2004 SCC (L&S) 337] (vide SCC para 31), University Grants Commission v. Sadhana Chaudhary [(1996) 10 SCC 536 : 1996 SCC (L&S) 1431] , etc. It follows, therefore, that even if no reason has been given in the counter-affidavit of the Government or the executive authority as to why a particular cut-off date has been chosen, the court must still not declare that date to be arbitrary and violative of Article 14 unless the said cut-off date leads to some blatantly capricious or outrageous result.”


11. In fact several decisions of the Hon'ble Supreme Court have gone to the extent of saying that the choice of a cut off date cannot be dubbed as arbitrary even if no particular reason is given for the same in the counter affidavit filed by the Government, (unless it is shown to be totally capricious or whimsical). [State of Bihar vs. Ramjee Prasad 1990(3) SCC 368, Union of Indian & Anr. vs. Sudhir Kumar Jaiswal 1994(4) SCC 212 (vide para 5), Ramrao & Ors. vs. All India Backward Class Bank Employees Welfare Association & Ors. 2004 (2) SCC 76 (vide para 31), University Grants Commission vs. Sadhana Chaudhary & Ors. 1996(10) SCC 536, etc .] When it is seen that a line or a point there must be and there is no mathematical or logical way of fIxing it precisely, the decision of the legislature or its delegated must be accepted unless it can be said that it is very wide off the reasonable mark. (See Union of India & Anr. v. Mis Parameshwaran match works Ltd., 1975 (2) SCR 573, at p. 579; and Dr. (Mrs.) Sushma Sharma etc. etc. v. State of Rajasthan & Ors. 1985 (3) SCR 243, at p. 269) 


12. In view of the above reasons, all the representations for further extension of the due date are hereby rejected. 


(Shefali Singh)

Under Secretary (TPL-IV)


Download Copy of the Order issued by CBDT u/s 119 dated 11.01.2021 on rejection of extension of due dates for filing of ITR and TAR for AY 2020-21 in pdf format

Update:

CBDT issues corrigendum dated 12/01/2021 to order u/s 119 of the Income-tax Act, 1961 passed on 11/01/2021 due to some typographical error in the original order.



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